Changes to the Tier 1 Entrepreneur Job Creation Requirement
Although the Tier 1 (Entrepreneur) route closed to new applicants on 29 March 2019, many Entrepreneurs remain on this route, and are permitted to extend their leave and to apply for Indefinite Leave to Remain. However, the Covid-19 pandemic has impacted many businesses which, in turn, has resulted in a number of Tier 1 (Entrepreneur) Migrants struggling to meet one of the more difficult requirements to extend their leave or to settle as an Entrepreneur: the job creation requirement.
On 6 October 2021, the Statement of Changes (HC 617), published on 10 September 2021, will take effect in respect of changes to the job creation requirement of the Tier 1 (Entrepreneur) route. It should be noted, however, that there is no provision which states that applications submitted before this date will be subject to the current Immigration Rules. This is likely because changes due to take place already appear in the guidance, as set out below.
Tier 1 Entrepreneur Job Creation Requirement
The job creation requirement is an essential requirement for an extension of a Tier 1 (Entrepreneur) visa, or an application for indefinite leave to remain as a Tier 1 (Entrepreneur). More details regarding the job creation requirement can be found in Appendix A: Attributes to the Immigration Rules.
In summary, the applicant must have either:
- Established a new business or businesses that has or have created the equivalent of at least two new full-time jobs for settled workers; or
- Taken over or invested in an existing business or businesses and their services or investment have resulted in a net increase in the employment provided by the business or businesses for settled workers by creating the equivalent of at least 2 new full time jobs for settled workers.
The jobs must have existed for at least 12 months during the applicant’s most recent grant of leave as a Tier 1 (Entrepreneur) Migrant or, where that leave was granted less than 12 months ago, for at least the 12 months immediately before the date of application.
These roles must:
- Be ‘the equivalent of’ a full-time job which means two or more part-time jobs that add up to 30 hours per week, if each job exists for at least 12 months or one full-time job of at least 30 hours of work per week; and
- Comply with all relevant UK legislation including, but not limited to, the National Minimum Wage Regulations in effect at the time and the Working Time Regulations 1998.
It is possible to rely on jobs which have lasted for 12 months, but were not consecutive, provided it is the same job, and the job need not exist at the date of application. It is not possible to combine different jobs that have existed less than 12 months to make up a 12 month job. The Immigration Rules, at paragraph 50 of Appendix A: Attributes to the Immigration Rules, specify the documents that must be submitted with the application to meet this requirement.
The Impact of Covid-19 on the Job Creation Requirement
The Home Office recognised that many applicants would struggle to extend or settle as a Tier 1 (Entrepreneur) as a result of the impact of Covid-19. Accordingly, a concession was incorporated into the Coronavirus (Covid-19): advice for UK visa applicants and temporary UK residents policy which was first published on 24 March 2020, but most recently updated on 28 September 2021 (at the time of writing). The policy currently states, in respect of Tier 1 (Entrepreneurs):
“If you have a Tier 1 (Entrepreneur) visa and your business has been disrupted
You no longer need to employ at least 2 people for 12 consecutive months. The 12 month period you’re required to employ someone for can be made up of multiple jobs across different months but this must be equivalent to 2 full time jobs.
Time when your employees were furloughed will count towards the 12 month period if they have been paid at least 80% of their normal salary.
If you’ve not been able to employ staff for 12 months by the time your visa expires, you’ll be allowed to extend your stay for a further 2 years, if you can show:
- you‘ve created at least 2 jobs by the date you apply
- you’ve been unable to employ staff for 12 months due to coronavirus”
This was also incorporated into Tier 1 (Entrepreneur) of the Points Based System – Policy Guidance, version 12 / 2020. Which confirmed that applicants who have had their businesses disrupted as a result of the pandemic no longer need to employ at least two people for 12 months in order to qualify for an extension. It further confirms that:
- The 12 month period of employment requirement can be made up of multiple jobs across different months, provided that they are equivalent to two full-time jobs when combined;
- Time spent on furlough under the Government’s Job Retention Scheme will count towards the job creation requirement, provided the employee has been paid at least 80% of the normal salary; and
- Applicants who have not been able to employ staff for 12 months by the time their visa expires will be allowed to extend their stay for a further 2 years, if they can show that they have created at least 2 jobs for settled workers at the point of making the application, and they have been unable to meet the ordinary requirement due to the impact of the pandemic.
The first bullet point is a move away from what is ordinarily permissible under the Immigration Rules (as set out above) which permits an applicant to count two settled workers’ time in the same role to be combined, where they do not last for 12 consecutive months in the role on their own. For example, a person could be hired for six months in one year to fill the role of ‘Secretary’ and a different person could be hired for six months in the following year to fill the same role of ‘Secretary’.
This concession now allows for two different jobs to be combined to meet the requirement, provided that they have together lasted for a period of at least 12 months. For example, six months of a settled worker in the role of ‘Secretary’ can now, under the concession, be combined with six months in the role of ‘Production Manager’ to meet the requirement of creating a role lasting 12 months.
Whilst the guidance is helpful, and has allowed many who would not have been eligible to extend / settle to remain in this route, many practitioners were concerned that none of the above had been incorporated into the Immigration Rules. Therefore, initially, the latest statement of changes was exciting, with many of us hoping to see all of the above concessions being added to the Immigration Rules. However, this is not the case, as only the final concession above has been incorporated.
Changes to the Immigration Rules
Unfortunately, not all of the concessions set out in the guidance are being incorporated into the Immigration Rules. The only change is being made to Table 6 of Appendix A, which contains the main requirements for settlement in this route. Line 3 currently states:
The applicant has:
(a) established a new business or businesses that has or have created the equivalent of at least 2 new full time jobs for settled workers, or
(b) taken over or invested in an existing business or businesses and their services or investment have resulted in a net increase in the employment provided by the business or businesses for settled workers by creating the equivalent of at least 2 new full time jobs for settled workers.
The jobs must have existed for at least 12 months during the applicant’s most recent grant of leave or, where that leave was granted less than 12 months ago, for at least the 12 months immediately before the date of application.
The following is being added underneath:
“In respect of an applicant who was granted a COVID-19 related extension of leave, the applicant must have:
(i) created two jobs meeting the criteria in (a) or (b) for at least the 12-month period referred to above; and
(ii) created at least a further two jobs meeting the criteria in (a) or (b) that have been in existence for at least 12 months by the date of application (these jobs can be the same as (i) providing they meet the requirement of existing for at least a further 12 months).”
Accordingly, Applicants who extended their visa by relying on the above concession because they could not create two jobs due to the Covid-19 pandemic will now need to show that they have either created four jobs which have lasted for at least 12 months or two jobs which have lasted at least 24 months, in order to settle. Whilst this ‘buys’ more time for Applicants wishing to extend who cannot meet the job creation requirement, they will pay the ‘full price’ in due course when they wish to apply for indefinite leave to remain.
One additional change has been made to the accelerated settlement requirement in line 4 (b) (i), which currently states:
“(i) created the equivalent of at least 10 (including the two jobs already relied upon to score points under row 3) new full time jobs which meet the requirements in row 3 above, or”
The change will remove the word ‘two’, so that more than the two jobs created can be included in the ten jobs requirement for settlement on an accelerated basis.
What does this mean for Tier 1 Entrepreneurs?
The guidance and concessions set out above, are clearly beneficial to applicants whose businesses have struggled as a result of the pandemic. However, the reality is that the impending changes to the Immigration Rules will have little impact on applicants in practice, given that the concessions have been in guidance and policy for some time.
It is important for applicants, seeking to rely on these concessions, to take note of how this will affect their future applications for settlement. It is prudent to keep accurate records of their employees, including employment contracts, payment records and identity documents. In addition, they should ensure that they have as much evidence as possible in order to demonstrate the genuineness of their business and the impact of COVID-19, if applicable.
Contact our Immigration Barristers
For expert advice regarding the requirements for leave in the UK in a business category, contact our immigration barristers on 0203 617 9173 or complete our enquiry form below.